To decontrol or not to decontrol?

With the state laws that govern the rent-stabilized and rent-controlled apartment industries set to expire yesterday (June 15), owners and operators of these units last week were hoping that the regulations would not be extended without some reform in terms of vacancy decontrol.

On the eve of the sunsetting of rent regulation, The Community Housing Improvement Program (CHIP) met last week to examine this and other issues of concern to the rent-regulated industry, from which it draws its members.

Excutive Director Dan Margulies expressed concern that senators who believe these laws go a far way in protecting the wealthy will "stand up for decontrol." Margulies said that Senate Majority Leader John Marino (R-Nassau) has said he will "not pass a straight extender."

Marino and Housing Committee Chairman Kemp Hannon (R-Nassau) both support extension with reforms. Meanwhile, Senators Goodman (R-Manhattan) and Frank Padavan (R-Queens) are among those senators that would like to see rent laws become permanent.

There is virtually no steam for decontrol in the Assembly. Democrats in that house passed a two-year extension and a permanent extender earlier this year.

So it remained a question whether the State Senate would pass some vacancy decontrol, extend the laws with out any reforms or extend them for two weeks or a month until the issue is resolved.

Another unknown, Margulies noted, is if the city in its budget negotiations will raise the tax levy.

Public hearings on proposed rent guidelines will be held June 14 and June 17 at Police Plaza and members were urged to testify. The proposed hikes are 3 percent for one year; 5 percent for two years and a 5 percent vacancy allowance for units priced at under $400.

"It was an acknowledgment of some members of the [Rent Guidelines] Board that $400 is a low rent," said CHIP President Andrew Hoffman. "They just don't know what to do with the $400 rent ... No matter how they try to help us they never seem to do the right thing."

On the issue of lead in paint, Margulies said, owners are fighting a three-front war: One with the city, one with Washington - both of which want to enact legislation, and one with the insurance companies that want to exclude lead coverage from policies.

One owner said that he is being sued for $10 million over lead in a building that he does not even own anymore. He says that while he abated the lead condition in the building the building that insured him at the time does not want to cover him because he did inform them of the lead or the abatement.

It is the lawsuits, and laws that don't exist yet, that owners should be concerned about, said one owner.